TMI Blog1985 (11) TMI 233X X X X Extracts X X X X X X X X Extracts X X X X ..... eatly strained Banker Constitutent relationship was pending for over 5 years. 2. We have heard Sri Shekhar Shetty, learned Counsel for the appellant. The petitioning creditor having filed a Caveat, Sri S. G. Sundaraswamy and Sri S. Ramaswamy Iyengar, appeared for the Bank. We have been taken through the order under appeal and the evidence on record. We are satisfied that the findings of the learned Company Judge that the petitioning-creditor has established the existence of a substantial part of the debt claimed by it and that the defence of the Company is not substantial nor in good faith do not call for interference. They are supportable even on the undisputed documentary evidence, leaving out altogether the other evidence which might admit of some debase on certain legal technicalities. We will state the reasons that weigh with us for our inability to accept the several contentions which Sri Shekhar Shetty ably... and at greath length.presented at the hearing on admission. 3. We may, however, briefly set-out the circumstances leading-up to the winding-up petition: The Company was incorporated in the year 1965 as a Private Limited Company with the object, in collabora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Bank under seven Cash Credit accounts and the amounts claimed are : Sl. No . Head of A/c Limit sanctioned Amount due 1. Cash CreditA/c. No. 25,00,000 24,50,000-00 2 . Cash CreditA/c. No . 20,00,000 20,00,000-00 3. Cash CreditA/c. No. 18,00,000 14,01,954-89 4. 5,00,000 5,00,000-00 5. Cash CreditA/c. No. 25,00,000 25,00,000-00 6. Cash CreditA/c. No, 77,00,000 1,68,62,365-84 7. Cash CreditA/c. No. 40,00,000 36,47,715-36 Total 2,10,00,000-00 2,93,62,036-09 According to the Bank the limits sanctioned were secured by pronotes executed by the Company i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany denied due execution and accused the Bank of committing acts amounting to forgery. It was contended that signatures on all the material-documents had been obtained from Sri and Smt. Hegde, the two directors in blank-forms. The Company categorically denied that it owed the sum of ₹ 2,93,62,036- 09 claimed by the Bank. It contended that the Company had large counter-claims towards Damages against the Bank. On these grounds it was urged that the debts were bona fide disputed. It was also urged that the debts were barred by time. It was contended that the Bank, as secured-creditor, could not maintain a winding-up petition without either giving up the security or valuing it as required by Section 9(2) of the Provincial Insolvency Act, 1920, and that the Bank having filed, subsequent to the institution of the winding-up petition, suits respecting part of the claims, the winding-up petition could not be permitted to be pursued. There were certain other defences. 7. Learned Company Judge framed 18 issues reflecting the points that arose for determination on the rival contentions. On the side of the Bank, H.S. Bhat (P.W.1) an Officer in the Commercial and Institutional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany. Learned Company Judge held that the Bank had established a substantial part of the debt claimed by it ; that the defence of the Company was not substantial nor bona-fide ; that in view of the several balance-sheets in which the debts had been acknowledged by the Company the debts were not barred by time and that there was no substance in the other defences urged by the Company. Learned Company Judge said : 13.17 There may be dispute on the question of interest as to whether it should be 15% or 12%.and therefore these amounts with 12% interest was admittedly due from HGL to the Bank. Therefore it cannot be said that there is a bona fide dispute. 14) It should be noted that even the dispute regarding interest cropped up only after 1977 as is evident from the balance sheets of HGL. Without adding interest a sum of ₹ 2,54,50,857/- was due from HGL at on 30-6-1979 and a sum of ₹ 2.62,94,862/- was due from HGL as on 30-6-1980. Therefore, even assuming that there was a dispute regarding the rate of interest after 30-6-1977 that dispute by itself will not afford a defence to HGL for repudiating the entire debt due to the Bank. Learned Company Judge examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Pursuantly all Original Side Appeals are listed for admission. But, as stated earlier, the point made by Sri Shetty loses much of its edge as we have heard Sri Shetty and have considered the merits of his contentions. 11. Sri Shekhar Shetty urged substantially the same contentions taken by way of defence before the learned Company Judge. The contentions raised before us are these: (a) Can a secured-creditor maintain a winding-up Petition without either giving-up the security or valuing it (b) Has the Bank proved its debt of ₹ 2,93,62,036-09 or a substantial part of it (c) Is the debt bonafide disputed by the Company. (d) Is the Company unable to pay its debt. Is the Company liable to be wound-up as an insolvent Company. Is the discretion to wind-up properly exercised. (e) Are the debts claimed by the Bank statute-barred. (f) Are the balance-sheets and Revival letters void on the ground that the authenticating Directors were themselves interested as creditors (g) Is the winding-up not permissible in view of the subsequent suits filed by the Bank. (h) Is the Bank held to have relinquished its claims under Order II Rule 2 CrP.C. (i) Has the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same and share in the distribution pro rata of the assets of the company just in the same way as he would be able to do in the case of insolvency under the Presidency Towns Insolvency Act or the Provincial Insolvency Act . In Hansraj's case4 it was observed : I am, therefore, of opinion that the rules contained in any Section of the Provincial Insolvency Act, the rules, if any, made under the Act and any appropriate established rules of practice in insolvency proceedings are imported into the Companies Act, unless there is something in the Companies Act itself already providing for the matter in question, or in conflict with the rule which it is proposed to import . These observations, in our opinion, do not advance the contention of Sri Shetty any further. Section 529(1) of the 'Act' attracts the rules of insolvency to winding-up in relation to the respective rights of secured and unsecured creditors and confines these Rules so attracted to matters that arise between these two classes of creditors. Sections 528 and 529 of the 'Act' are in the chapter Proof and Ranking of Claims and deal with the question of proof of debts and the rights of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may pursue the remedies which he possessed before the winding up. If a secured creditor of an insolvent company proves for his debt, the rules in bankruptcy applicable to proofs by secured creditors apply (vide para : 1299) In Moor -v.- Anglo Italian Bank, 1879(10) Ch. 681, George Jessel M.R. referred to the Rule in Bankruptcy that secured-creditor, to obtain adjudication, must give up the security or value it asserting it to be of less value than his debt, said that such a Rule had no application to winding-up and that there was also no mode of applying it to winding up. Learned Master of the Rolls observed ; That is quite true in bankruptcy to obtain adjudication, but there is no such Rules in winding-up No such rule apply at all ; but the winding up is equally good whether it is obtained by a secured creditor or an unsecured creditor. 15. Appellant's objection to the maintainability on this ground is not, therefore, one of substance at all. There is no merit in point-(a). 16. Re : POINT (b) : Has the Bank proved its debt. Issues 1 to 7 framed by the Learned Company Judge relate to this question. Sri Shetty says that the Company had disputed the existence an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from the depositions of PWs 1 and 2. Therefore, the contents of the documents could be said to have been proved and it is open to this Court to rely upon these documents for a proper consideration of the competing contentions of the parties. The second is at para-11.9. It was then observed : 11.9)--But he and bis wife knew what they were signing, they knew the contents thereof in some cases and in some cases they did not bother to know the contents. But all the same they signed them. Therefore, they are bound by the said documents and they cannot deny the existence of the loan transactions merely on the ground that those documents did not come into existence in the proper manner on the dates mentioned therein. Sri Shekar Shetty says that both these reasons are clearly erroneous and untenable. Counsel says that consistent with the finding that the documents on which the Bank relied were ail filled-up later, there was no question of recording a finding as to the existence of the debt on the mere ground that the documents were not objected to at the time of marking. On this aspect, the point made by Sri Shekar Shetty cannot be lightly brushed aside. It is one thing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted on the day and in the manner claimed. The contention of Sri Shetty that documents respecting which the learned Company Judge had, himself noticed these infirmities, could not be relied upon may have some force. The second reason for placing reliance on the documents is that though the signature of both Sri Hegde and Smt. Hegde might have been obtained on blank-forms, both of them, admittedly, knew the nature, purport and purpose of the documents they were signing and that, therefore, the documents could be relied upon by the Court to sustain the Bank's claim. Sri Shetty says that the learned Company Judge was in error in taking this view. There is, perhaps, some force in this too. So far as the documents are concerned, the defence of the Company is one of denial of due execution, though the signatures on all the documents were admitted. In those circumstances, the defence of non-est-factum may not be available to the Company, but, yet, the question of proof of due execution of the documents remains. If execution is denied, the party relying on the document must prove due execution, unless the circumstances themselves raise a presumption of due execution. Execution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings between them. What were these fair proposals ? In the said letter, the Company, inter-alia, proposed that the Bank should give immediately ₹ 75 lakhs additional working capital and to merge into one Term Loan one Cash Credit I Loan of ₹ 25 lakhs, Cash Credit II ₹ 20 lakhs, Cash Credit III of 18 lakhs (Bridge Finance) totalling to ₹ 63 lakhs with a Moratorium of 2 years for interest and instalments - the same to be repaid in 6 annual instalments of ₹ 10 lakhs each and one final instalment falling due at the end of 24 months from the date of term loan agreement and that interest for the first two years to be paid in equal instalments along with interest for the 3rd and 4th year. It was also proposed that the total working capital accommodation of ₹ 222 lakhs will bear interest at 12 1/2% per annum for the first two years and thereafter at normal rates. There were other areas of controversy referred to in the proposal. The points of controversy are clearly limited and identifiable in the proposals. The Company did not deny the borrowings or that substantial sums were due. Therefore, the nature, quality and scope of the defence pertain t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Sheets of the Company (as on 30th June of each year) for the years 1974 to 1982 are at Exts. P. 135, P.136,P.137, P.127, P.128, P.129, P.131, P.130,and 132 respectively. In the respective Balance-Sheets for the years 1974 to 1977 the amounts shown as due are ₹ 46,46,818-00; ₹ 71,25,519-00, ₹ 1,22,60,285-00 and ₹ 1,73,01,422-00 respectively. There was no condition or rider added to these acknowledgments. They are categoric and unconditional. 23. Sri Shetty says that once the due execution of the primary documents viz., the pronotes is not proved, the Balance-sheets and Revival letters would not take the Bank any further. He says that the cause of action is the execution of the pronotes which, according to him, are in the nature of suit documents and if they are excluded, no action could be sustained on mere acknowledgments. He says acknowledgments merely furnish a fresh starting point for limitation and do not furnish a fresh cause of action. Sri Sundaraswami relying upon the decision in Hiralal -v.- Badkulal, urged that an acknowledgment also furnishes a fresh cause of action. A mere unilateral acknowledgment does not supply a fresh cause of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y liquidation (even though made by a proceeding not instituted by the presentation of a plaint) is considered to be a suit instituted within those words in Section 3, and that a claim similarly made by or on behalf of such a company must necessarily, or may similarly, be treated as a suit instituted within the section. Repelling this contention, the Judicial Committee said : Their Lordships do not accept the view that a claim against such a company (not made by a proceeding instituted by the presentation of a plaint) is by virtue of the explanation to be considered to be a suit instituted within the section To show the debt, the creditor, in a winding-up petition, may well rely upon the admissions implicit in an acknowledgment of the debt. Such an admission is implicit in every acknowledgment. In Maniram Seth v. Seth Rupchand, ILR 33 Calcutta 1047 the Judicial Committee observed : An unconditional acknowledgment has always been held to imply a promise to pay, because that is the natural inference, if nothing is said to the contrary. It is what every good honest man would mean to do. 26. But even if a higher standard of proof of the existence and extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned Judge indicates he had excluded these documents from the category of those in respect of which he had observed the infirmities (see end of the sub-para 12.4). The claim of R.W.6 was that they were signed when they were all blank. There is no finding that it is so. The persons signing are not ignorant or illiterate persons. They are persons well versed and experienced in business and corporate management. In such cases, if signatures are admitted a presumption of due execution arises. But Sri Shetty says, that the Bank had admitted that the Revival letters of 5-12-1978 had not been signed and returned to them. This admission is sought to be read in the following portions of the Bank's letter, Ext.P.97, dated 31-3-1979 : 8. Again your company have not also forwarded to us so far, despite reminders, copies of the resolution passed by your Board relating to extended drawings in your Cash Credit accounts and execution of revival letters on 5-12-1978. We should request you to kindly do the needful in this regard early. This is sought to be read as the Bank saying that the Revival letters of 5-12-1978 had not been returned at all. What the Bank was complainin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Golay, I came to know that this Company had borrowed large sums of money from the State Bank of India. In the course of my audit I satiated myself that the debits shown in the Company's books regarding the principal and interest due to State Bank of India were in accordance with the documents executed by Hegde and Golay in favour of State Bank of India. Similarly, in any of the Balance Sheets prepared by my firm it has not been shown that the excessive sums were charged as advances from the State Bank..According to me, the amounts shown as due to State Bank in the Balance sheets namely. Exs. P. 123 and P. 127 to P 131 are correct Sri B.T. Shankar Hegde (R.W. 6) says ; My company has maintained regular books of accounts regarding its business. Our books of accounts reflect faithfully and correctly the receipts and expenses pertaining to our business. It also shows the amounts What the SBI says that it had lent, but it is not correct. The moneys appearing to have been paid by SBI also find a place in our books. The debit balance of the company accord with the debit balance against us in the books of the bank up to 1976. Subsequent to 1976 the debits in our books accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is as to the unilateral appropriations. It is no doubt true that as higher limits were sanctioned from time to time, the sanctioned amounts were wholly or partially applied and appropriated towards interest accrued due in other accounts and in some cases transfered to other accounts where the Company had over-drawn. In some cases sums were appropriated by the Bank towards the liability of the Ancillary Companies whose loans the Company had guaranteed. It may be that for these transfers and appropriations there were no express consent or authority from the Company. As to the permissibility of such appropriations as a matter of regular banking practice R.W. 3 (Company's Chartered Accountant) says : .When further limits were sanctioned the excess debits were regularised by book adjustment. This is a very normal banking practice. The company had not taken any objection to such regularisation. The second point is that the loans were mot payable on demand. We have held in para 24 supra that sums due under a cash-credit are repayable when the account is called up. The third contention on the point is that there were substantial counter-claims by the Company against the Ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; But, if a 'secured-creditor' is, otherwise, entitled to invoke 434(1)(a) then the provision in it as to furnishment of security would, in his case, be inapplicable and this mode of compliance with the statutory-demand would be unavailable to the Company. Section 439(1)(b) says any creditor can present a winding-up petition. Sub-section (2) of Section 439 says that a 'secured-creditor' is deemed to be a 'creditor' within the meaning of Section 439(1)(b). Having regard to the scheme of Part-VII it does not appear logical that the expression creditor in Section 434(1)(a) should be given a meaning different from what it connotes in Section 439. In the case of the secured-creditor, therefore, the only way compliance could be shown to the statutory-demand is otherwise than by offering security. Indeed, winding-up petition is one of the means of recovery of a just debt. It is a mode of equitable execution. Therefore, the Company must, in view of non-compliance with Ex.P.47 be deemed to be unable to pay its debts within the meaning of Section 433(e) of the Act. 35. Even assuming that a 'secured-creditor' does not have the benefit of, and is ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of the second kind of insolvency contemplated by provision analogous to Section 433(1)(c) learned Author says: Paragraph (d), however, now recognises and, in conjunction with Section 222(e), expressly authorises a winding-up in the case of another kind of insolvency ; that is to say, if the existing and probable assets will be insufficient to meet the liabilities, taking into account not only liabilities presently due but also those which are contingent and prospective. 37. Learned Company Judge has gone into this question elaborately and has, in substance, held that both the kinds of insolvency are established in this case. We are in respectful agreement fully with the learned Company Judge that the first kind of insolvency is established viz., the Company is unable to meet its current liabilities and current demands upon it including the debts; owing to the Bank. This is sufficient for the purposes of this case. However, as regards the second kind of insolvency which takes into account larger issues of the financial stability of the Company the matter may, perhaps, bear further examination. We do not want to be understood to say that the finding of the learned Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out certain basic infirmities in the valuation reports in this behalf. The items disputed by the Bank themselves account for more than half the valuation. 41. But it appears to us that it is not necessary to examine the question whether the Company is insolvent in this larger sense, which in turn depends on the correctness of the Valuation Reports Exhibits R- 4 and R-ll. It is unnecessary to be gone into it as, even assuming that the Company was not insolvent in the larger sense, the finding that it was unable to repay its current liabilities and demands on which we entirely agree with the Learned Company Judge - would itself be sufficient to support the conclusion that the Company is unable to pay its debts. We, therefore, find no substance in the challenge to this finding. The third point urged is that even if the existence of the debt and inability on the part of the Company are both established, a winding-up order is not made as a matter of course, unless the Court is satisfied that, having regard to all the circumstances, it is a proper exercise of discretion to make an order of winding-up. Sri Shetty says that an order of winding-up is an order of last resort a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is unpaid and the company is insolvent it is the duty of the Court to direct a winding up and the creditor is entitled to an order ex debito justitiae. On the other hand, it has been said that the latter is a phrase which means no more than that in accordance with settled practice the Court can only exercise its descretion in one way namely by granting the order These statements can be reconciled on the basis that although the matter is a complete and unfettered judicial discretion the discretion is exercised in in accordance with certain established principles, but the principles do not bind the Court in an all or nothing way. In accordance with these principles the creditor has a prima facie right to a winding-up order which is subject to certain exceptions. In accordance with these principles the creditor has a, prima facie, right to a winding-up order subject of course to certain well-recognised exceptions. Referring to the limited scope of the discretion to refuse winding-up and exceptional considerations under which an order could be denied, Palmer says : (1) Where the petitioner's debt is less than 200 ; (2) the debt is bona fide disputed by the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioning-creditor's debt was alive on the date of presentation of winding-up petition but was statute-barred as on the date of making of the winding-up order. The General Principle of adjudication is that in legal-proceedings matters are decided on the basis of sights and obligations of the parties as on the date of the commencement of the list ; though, however, it is open to the Court to, take note of subsequent events both of fact and law to mould relief. Supreme Court in Rajahmundry Electric Supply Corporation Ltd. -v.- A. Nageshwara Rao Ors., held: The validity of a petition must be judged on the facts as they were at the time of its presentation, and a petition which was valid when present cannot, in the absence of a provision to that effect in the statute, cease to be maintainable by reason of events subsequent to its presentation. Again in Seth Mohan Lal and Anr. -v.- Grain Chambers Ltd. Muzaffarnagar ors., , the Supreme Court observed : Primarily, the circumstances existing as at the date of the petition must be taken into consideration for determining whether a case is made out for holding that it is just and equitable that the Company should be wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmity. His contention is that the two directors i.e., B.T. Shanker Hegde and Smt. Shaila S. Hegde, who signed the balance-sheets and Revival Letters were themselves creditors of the Company respecting the same debts and the directors held a fiduciary capacity in relation to the Company and that in acknowledging and reviving the debts they were virtually acknowledging and reviving the debts of the Company in their own favour. Sri Shetty contends that in such a case, the acknowledgments and revivals are void, because of the conflict between duty and interest. He contends that even if the acknowledgments and revivals are other-wise valid, the circumstances that in respect of the same transaction the directors who authenticated the Balance-sheets and signed the Revival Letter are themselves in the position of creditors of the Company would vitiate the transactions. In support of the proposition that the Directors were themselves in the position of creditors of the Company, learned Counsel recalled that the Company had executed the promissory-notes in favour of the two directors who had, in turn, endorsed them in favour of the Bank. This, according to Shri Shetty, put the Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts. Secondly, it is urged that though liabilities are shown under several accounts, in substance all the accounts constituted one integrated transaction and that the Bank, in confining the suits only to a part of the whole-claim, bad split-up the cause of action and in respect of the rest of the claim, not included in the first-suit, there was a relinquishment under Order II Rule 2 of the Code of Civil Procedure. In view of the relinquishment, says Counsel, the debts to the extent not included in the first-suit were not recoverable and no winding-up order could be based on such debt. Learned Company Judge has rejected this defence. We respectfully agree with the view taken. 49. It is no doubt true that the Bank had, subsequent to filing of winding-up petition, instituted three suits. Sri Shekhar Shetty stated that the claim in the first suit was ₹ 14 lakhs and that the Company would, if so directed, deposit this amount under protest, subject to the result of the suit. So far as the other two suits are concerned, Sri Shekhar Shetty's contention is that the claims in the subsequent suits and the entire rest of the Bank's claim were hit-at by Order II Rule 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion executed by RW-6 and his wife committed forgery. It has come in the evidence of the Chartered Accountant RW-4 that copies of all these documents were with HGL when they audited the accounts of HGL. It has also come in the evidence of RW-1 that the documents executed during his time were executed by Sri and Smt Hegde in favour of the Bank and they were so executed in the normal course of business and though he had noticed the absence of dates in some documents, he had brought this to their notice. If the nature of cash credit transactions are understood in their proper perspective, in my view, despite the discrepancies in the various documents pointed out to me by the Learned Counsel, they have come into existence in the regular course of banking business and therefore, the plea of forgery must fail. The plea of forgery is also not sustainable since in my view HGL has ratified and adopted the accounts of the Bank regarding transactions in question by its own conduct as reflected in the balance sheets of HGL and the revival letters Exs. P-6, 7, 14, 15, 69,70 etc. Sri Sundaraswamy says that the observations of the Company Judge that some of the documents were signed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecurities. Now, so far as I can learn from the evidence before me, all the substantial property of the company is included either in the first or the second mortgage, or in the further charge, and whatever is not included in them is swept up by the debentures.. I think, therefore, that at the present time, no practical good can result from a winding up order . From the order of the Company Judge, apparently, this point was not urged before him. But it appears to us that the position is really different on the facts. First, even a creditor who has full security for bis debt can move for winding-up though he may not seek to prove his debt in winding-up: (See-Pennington, 4th Edition,) Secondly, all the assets of the Company were not secured to the Bank. Karnataka State Financial Corporation was another secured creditor. It had supported the winding-up RW-3 refers to the existence of other debts to the extent of ₹ 74 lakhs. Thirdly, the case, of the Bank is that the value of the security had itself greatly denuded over the years and its debt in a large measure remained unsecured. The principle to which Sri Shetty appeals cannot, in our opinion, be invoked in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roper appraisal of his project when he obtained finances from the petitioner Bank and other financing institutions is not clear from the record. How he sustained his credibility in the. financial market when his foreign collaborator went into bankruptcy before bis project took off is also not clear from the record. However, with no formal education and starting his life in a humble way, he made a bold bid to achieve industrial fame. Sri Shetty urged that the considerations that learned Company Judge took as relevant were, by themselves, neither material nor conclusive. The circumstances that the Company had not declared dividend was not, by itself, decisive nor was the circumstance that the shares of the Company which were of a face value of ₹ 100/- had been shown to have been purchased, after the filing of the winding up petition, at ₹ 3/- per share. Sri Shetty pointed out that by no actuarial valuation could this value of ₹ 3/- per share be said to be the break-up value and that, at ail events, they were all after the filing of the petition. Sri Shetty stated that the learned Company Judge had, in substance, persuaded himself to the view that the substratum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition would require to be admitted. We are of the opinion that the order of winding-up is clearly supportable under Clause (e) of Section 433 of the 'Act'- We do not wish to be understood as having recorded a finding against the Bank under the ground available in Section 433(f). As stated earlier that finding on further examination, may be found fully justified. But, even without it the winding-up order can stand. 56. Before parting with the case we think that it will not be inappropriate to say that Company's enterprise did initially show some promise and potentiality. A modern Technology in this field and in the field of Printed Circuit Boards is, perhaps, an area with potentialities. On account of circumstances which can only be called unfortunate the Company has found itself in the present mess. The winding-up order would put a final seal on all its ambitions and potentiality. The apprehension of the Bank expressed quite often during the hearing was that, with all the security, it may not be able to realise even a part of its just dues. It appears to as that if Sri Hegde would put himself in a position to offer to the Bank terms which may be better than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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